For those operating in the cannabis space and considering implementing cannabis cultivation ERP software, it’s essential to understand the pros and cons of such a system.
Any operation interested in scaling must also scale systems to manage the growing pains. And while plenty of options are out there for ERP software, cannabis business operators need one that specializes in cannabis.
This article will review the pros and cons of implementing cannabis cultivation ERP software. By the end of this post, you’ll know what to expect as you increase efficiency with a cannabis ERP addition to your cannabis software stack.
Looking to learn more about compliantly running a commercial grow in the cannabis industry? Make sure to check out our post about choosing the right seed-to-sale software platform before you leave!
What is Cannabis ERP Software?
Cannabis ERP software, also known as marijuana ERP software, is a business management software designed specifically for the cannabis industry. It’s used to manage various business processes, including but not limited to cultivation, inventory, compliance, and point of sale (POS).
For those considering incorporating ERP software into their operations, it’s essential to understand that cannabis ERP software differs from traditional ERP software in a few key ways.
ERP software for cultivators is designed exclusively for the cannabis industry, and therefore, it has features that other ERP software may lack. For example, it typically includes comprehensive tracking and reporting capabilities to ensure regulatory compliance. Additionally, cannabis software won’t even give you a chance to think to yourself, “how long does a software update take“, as it only takes a few minutes. Unlike other ERP software.
Equally important to note is that the cannabis industry is still federally illegal in the United States. Thus, most traditional ERP software providers do not support businesses operating in this space. As a result, cannabis operators must seek out providers specializing in ERP software for their industry.
Now that we’ve covered what cannabis ERP software is and how it’s different from traditional ERP software let’s examine its pros and cons for your business.
Pros of Implementing an ERP System
Before we get started, there’s a common debate about the confusion between ERP vs. MRP. We’ve linked a resource to save you some independent research time. With a complete understanding of the difference, you should have more clarity on making a decision for the Cannabis ERP software that you decide to go ahead with.
Better Team Collaboration
With an ERP system, different parts of your business can work together better. This makes it easier for other people to share information and work together.
For example, if you’re a cultivator, your ERP software can track how much product you have, where it is in the grow cycle, and when it needs to be shipped out. This information can be easily shared with the sales team to manage customer expectations better.
The bottom line is that an ERP system enables better collaboration between different teams within your organization.
Improves Total Visibility
ERP software offers seamless access to every prong of your cultivation business’s operations and supply chair. It quickly retrieves data from each department within your organization, allowing immediate access by the senior management team. With this in mind, ERP software offers complete access to your operation’s moving parts.
Enhances Reporting & Planning
Production planning and performance modifications are made easier with insightful reports. With an ERP system, cannabis cultivation companies can access data-driven business intelligence reports instantly, offering a single source of truth they can use to improve their operational reporting and planning.
Cons to Adopting an ERP System
Takes Time to Implement Properly
With so much to manage, implementing ERP software takes time. However, it can also be challenging, so having a dedicated project manager trained to customize the system and set it up for your operation is essential.
Since it takes collaboration between all departments, fully installing the ERP system usually takes months. This is especially the case for operations that don’t have all business groups working onsite full-time as they’re not always available to train.
Costly & Challenging to Customize
Changing and updating ERP systems is challenging. The installation and setup will require a specialist or vendor consultant. This makes the total cost of system implementation high. Thus, a multi-system approach might make more sense for cannabis businesses that have to keep up with changing needs than incorporating an all-in-one ERP.
Requires Technical Expertise
There’s a slight learning curve if you’ve never worked with an ERP system before. And when it comes to some systems, the curve is more intense than in others. With this being the case, you’ll likely need to hire an expert to help you get the most out of your new software.
Not Suitable for All Business Sizes
ERP systems are not one-size-fits-all solutions; instead, they vary in terms of functionality and price, meaning they might not be the best fit for your cannabis business, depending on its size and needs.
Who Needs an ERP?
Operators Using Multiple Software Systems
If you’re using multiple software systems and still find it challenging to communicate and give direct access to your company’s operational data, you might need an ERP. While it may be costly and challenging to implement, an ERP system will give you the visibility and control you need to manage your business more effectively. This is how you’ll bypass problems associated with data bottlenecks and processing errors.
Teams Handling Loads of Data
If you and your company handle lots of data, it’s probably become challenging to organize and understand it. Think about the time you’re investing in managing invoices, inventory, quality control, and cannabis sales orders; this time should be focused on other activities within your operation.
Cannabis ERP Platform Features
Inventory control is a critical feature for any ERP system, allowing you to track what products are in stock, where they’re located, and how much inventory is on hand. This information is critical for maintaining efficient operations and meeting customer expectations.
Sales tracking is another key feature of an ERP system, allowing businesses to see which products are selling well and where they’re being shipped. This information is essential for understanding customer needs and preferences, making production decisions, and tracking sales performance.
For businesses processing or manufacturing cannabis products, an ERP system can track raw materials, manage production schedules, support recipes, track inputs and outputs, and monitor quality control. This information is critical for ensuring that products meet regulatory requirements and are safe for consumers.
Cannabis cultivation companies can use an ERP system to track planting, harvesting, and drying cycles and monitor the progress of individual plants. This information is essential for ensuring that crops are harvested at the optimal time. But it’s also helpful in understanding the overall health of your plants.
Customer Relationship Management
This system offers in-depth insights into target customers while allowing for the easy creation and management of customer profiles. Additionally, it provides a platform for managing customer interactions, tracking sales opportunities, and generating reports.
While you’ll likely still need an accounting professional to manage your finances, an ERP system can provide valuable features, such as the ability to track expenses, invoices, and payments. This information is vital for ensuring that your business is financially healthy and making informed spending decisions.
Your ERP system should provide business intelligence reports you can use to guide your business decisions. Ultimately, these reports should help you increase efficiencies, reduce costs, and improve your bottom line.
Cannabis ERP Implementation
While an ERP system can offer many benefits for your cannabis business, it’s essential to remember that these systems are complex and require careful planning and execution to succeed. When considering an ERP system for your business, consult an experienced professional who can help you determine if an ERP system is right for you and, if so, which system would best meet your needs.
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